A debtor is not precluded from filing an application for adjudication as an insolvent even if there is only a single creditor.

( 1 ) THE Civil Miscellaneous appeal is directed against the order of the Additional Judge, City Small Causes Court, Hyderabad, dismissing an application filed by a debtor under Sub-section 6, 7 and 10 of the Provincial Insolvency Act, 1920. The learned Judge, in so dismissing the petition followed the decision of a single Judge of this Court in M. Somaiah v. P. Padma Bai (1969-2 Andh WR 274 ).

( 2 ) THE question that falls for consideration in this civil miscellaneous appeal is whether a debtor is precluded from filing an application for adjudication if there is only a single creditor. The appellants is working in Sagar Sanitary Works, Secunderabad. He was the highest bidder at an auction held for the issue of licence for a today shop at Kavadiguda, Hyderabad. He bid at that auction at the instance of one Eswaraiah. Eswaraiah was managing the business along with the appellants. A relation of his financed the business. According to him, he never looked into the accounts, with the result that the business resulted in loss and he could not pay arrears of rentals to the tune of Rs. 86,000. As he was not in a position to pay arrears due to the respondents (the Collector of Excise and Superintendent of Excise), he filed the application for adjudication as an insolvent. The application was opposed by the respondents, on the grounds that he is possessed of moveable and immoveable properties and that he deliberately concealed those properties.

( 3 ) THE only question that fell for consideration before the Court below was whether the appellants was entitled to be declared an insolvent. As already pointed out, relying upon the decision of this Court referred to above, the learned Additional Judge dismissed the application.

( 4 ) MR. P. Satyanarayana appearing for the appellants contended that the provisions of the Act impose no bar for petition being filed by a debtor even if there is a single creditor and the decision in M. Somiah v. P. Padma Bai (1969-2 Andh WR 274) goes against the scheme and object of the Provincial Insolvency Act.

( 5 ) THE question of maintainability of an insolvency petition against a single creditor came up for consideration in M. Somiah v. P. Padma Bai (1969-2 Andh WR 274 ). That was a case arising under the Hyderabad Insolvency Act. But the material provisions of that Act are almost identical with the provisions of the Provincial Insolvency Act. The learned Judge, noticing the words, debts; and creditors used in several of the provisions, opined that"as far as the scheme of the Hyderabad Insolvency Act as well as the scheme of the Provincial Insolvency Act, 1920 are concerned, the very purpose of the exercising of the insolvency jurisdiction in any given case, is only for the benefit of the body of the creditors and not for the benefit of any single creditor. "we are unable to endorse the view of the learned single Judge in that case. The object of enacting the insolvency law is to give relief to a debtor, who is unable to discharge the debts and protect him from harassment by his creditors and also to prevent a scramble among creditors to somehow get at the assets of debtor fraudulently or in collusion between creditor and debtor. The Act also provides a machinery by which the claims of genuine creditors could be equitable met. We see no special significance in the Legislature using the words creditors and debts. From the mere use of those words in plural, the object or the underlying policy of the insolvency law cannot be ascertained. The scheme, object the purpose of the Act can be ascertained on a proper construction of the relevant provisions. The expressions creditor and debtor have been defined. Creditor includes a decree-holder, debt includes a judgment-debt. Section 6 details the acts of insolvency. It clearly says that a debtor commits an act of insolvency in each of the cases enumerated in Clauses. (a) to (h ). Section 7 entitles a creditor or debtor to make an application for adju